By Adam Wilmoth
The Oklahoman

NORMAN- Unigas Corp. on Friday announced plans for a 30 billion cubic feet natural gas storage system to be built beneath Okfuskee County.

The Norman-based natural gas company is accepting nonbonding requests from natural gas producers and utilities to store fuel in the vast rock reservoir deep below eastern Oklahoma.

“In the same way a major distribution warehouse allows Wal-Mart to deliver just about anything to shelves throughout the area, this will provide confidence that producers and end users can get what they need anytime they need it,” Unigas Chief Executive Officer Henry Crichlow said.

Unigas plans to begin filling the storage system by the summer of 2008. At a capacity of 30 billion cubic feet, the facility is designed to release up to 600 million cubic feet of natural gas per day.

The United States currently has a total capacity of about 3.5 trillion cubic feet, most of which is housed in salt caverns along the Gulf Coast. Capacity nationwide has been expanded by at least 300 billion cubic feet since September 2005 when Hurricane Katrina disrupted much of the country’s natural gas production and sent prices to record highs.

Producers’ benefit seen

The proposed Unigas facility is designed in part to help moderate the price of a commodity that has fluctuated rapidly.

“Storage acts like a buffer,” Crichlow said. “It allows the system to meet demand that otherwise would send process skyrocketing.”

Natural gas producers also would benefit from increased storage, said Bruce Bell, chairman emeritus of the Mid-Continent Oil and Gas Association of Oklahoma.

“We need more stable prices. Not just higher prices,” he said. “We use less gas in the summer than in the winter. So if we take more gas off the market in the summer to put in storage, it’s going to keep summer prices from dipping so low.”

Highly volatile prices make it difficult for both producers and consumers to budget their estimated costs and sales, Bell said.

“I think most producers would be willing to give up some of the upside if they don’t have to worry about much lower prices in the summer,” he said.

Copyright 2007, The Oklahoma Publishing Company